A Guide to Digital Estate Planning: an Introduction

A Guide to Digital Estate Planning

Many years ago, you agreed to be the Executor of your sister’s estate, responsible for Mits administration. After she passes, you begin the process by going to her home tocollect all of her important financial documents. However, you cannot find her Last Will & Testament (“Will”). You head over to her local bank to see if the Will is in her safe deposit box. When you open the box, the only items within are a few pieces of diamond jewelry. You recall that she updated her Will five months prior to her passing, and she mentioned that her attorney e-mailed the document to her.

Great — but how do you get hold of it?

Given the information above, the first place you should look for this document would be your sister’s home computer or laptop. An e-mail account may also be the key to your sister’s brokerage, bank, and credit card statements. She may have arranged to have these documents sent to her via e-mail instead of receiving “hard” copies by regular mail.

Of course, this plethora of data is available to you, the Executor only, if you have the most current passwords necessary to access the computer. But what if you don’t? And if you do, is it legal? Enter the world of issues created by today’s digital age.

Desktops, laptops, tablets, portable hard drives, smartphones. . . we are truly living in an electronic era. Chances are, regardless of age, you use one or more of these devices to store important financial and personal information.

According to www.digitalestateresource.com, a website designed for “estate lawyers who need to learn about how to incorporate digital assets into estate planning,” digital assets can be defined as follows:

The term “digital assets” means, but is not limited to, files, including but not limited to, emails, documents, images, audio, video, and similar digital files which currently exists or may exist as technology develops or such comparable items as technology develops, stored on digital devices, including, but not limited to, desktops, laptops, tablets, peripherals, storage devices, mobile telephones, smartphones, and any similar digital device which currently exists or may exist as technology develops or such comparable items as technology develops, regardless of the ownership of the physical device upon which the digital asset is stored.1

Considering this definition, careful thought should be given to not only e-mail and online accounts but to everything that is stored on your electronic devices, in addition to the hardware itself. Think about all the digital assets you own and ask yourself, “Who should get what, and what should they do with it?”

The Changing Role of Executorship

If something were to happen to you, would your loved ones know where to look? And, if they did, would they be able to access your password-protected accounts?

With our increased reliance on electronic media, document storage, social media, and e-mail, has emerged a new role: that of the Digital Executor. This person’s responsibilities include closing e-mail accounts, social media accounts, financial services accounts, shopping accounts, and photo storage accounts. Ideally, the Digital Executor should be a tech-savvy individual who is adept at knowing how to access a computer without a password or can seek the appropriate advice on how to do so.

A digital executor that is facile with computers can try to “hack” into the computer, with some assistance from online websites. Asking for some professional help in the form of Best Buy’s Geek Squad or a similar service to help crack the password code is another option. There is one major question that hasn’t been resolved, however. Could the Digital Executor be committing an illegal act if they retrieve someone else’s digital files?

According to an article that appeared in late 2011 in Trusts & Estates magazine, if a Digital Executor obtains access to a decedent’s e-mail account without the e-mail provider’s knowledge, that action could possibly violate the provider’s terms of service and could constitute identity fraud. Another possibility is that it could violate The Computer Fraud and Abuse Act whose objective it is to make it more difficult for computer hackers
to breach computer systems. The Act makes it a criminal offense to intentionally access information contained in a financial record of a financial institution without authorization.

Unfortunately, the majority of state laws are quite murky about the legality of an executor retrieving the digital files of a decedent. All the while, retailers and financial services firms continually encourage consumers to transact online and, in some cases, offer incentives to do so. Many financial services firms, for example, encourage customers to sign on to receive online statements or pay bills on line. Similarly, electronic tax filing has become prevalent over the last few years, with e-filers generally receiving their tax refunds sooner than paper filers.

If something were to happen to you, would your loved ones know where to look? And, if they did, would they be able to access your password-protected accounts?

Very few states have turned their attention to the Digital Executor issue. Oklahoma, Idaho, Connecticut, and Rhode Island are the exceptions. Oklahoma and Idaho have passed laws giving the executor “the power, where otherwise authorized, to take control of, conduct, continue, or terminate any accounts of a deceased person on any social networking website, any microblogging or short message service website or any e-mail service websites.”

Iceland have slightly more stringent guidelines. Their laws authorize e-mail service providers to grant an executor or administrator access to a decedent’s e-mail account, upon receipt of a written request, a copy of the death certificate, a certified copy of the certificate of appointment, and a court order.4

In the absence of specific laws in your state, obtaining a court order might be the best way for a Digital Executor to access online accounts and the sensitive financial information they contain.

In case you don’t have enough to think about, perhaps your sister didn’t want to close her social media accounts, but instead wanted to leave a digital legacy. This is yet another aspect of estate planning that some individuals are thinking about
and putting into action. This could involve, for example, saving an archive of
your tweets on Twitter or keeping a whole account in perpetuity just as it was
when you were alive. Facebook, for example, will transform a deceased user’s
account into an online shrine of sorts where family and friends can leave
few states memorial messages. (No one can log on, however.) Websites such aswww.thedigitalbeyond.com and www.mywonderfullife.com are poised to help
turned their and offer services such as posthumous e-mail messaging, online memorials,
and digital estate planning.

Attention to the Digital Executor issue.

Additional online estate planning resources include such sites as AssetLock, Legacy Locker, and SecureSafe. For a fee, these sites will house your online information and ensure that your digital assets are distributed according to your wishes after your death. For example, Legacy Locker describes itself as “a safe, secure repository for your vital digital property that lets you grant access to online assets for friends and loved ones in the event of loss, death, or disability.” Some offer specialized digital estate planning software.

Advance Planning, As Always, is Paramount

With the assistance of your financial advisor and estate planner, the key to a successful estate plan — in this day and age, especially — is to plan ahead. It’s also critical to openly communicate with your Executor about all of your assets, digital and otherwise, whether he or she is an attorney, a bank officer, or a trusted family friend. Depending on the extent of your online activities, consider appointing two Executors — one for your digital assets and the second for all of your non-digital assets (both business or personal).

Most important is this — when you or a loved one is in the process of updating estate-planning documents, be sure to address with the estate attorney how the Executor will be able to access any digital information. Remember that any power of attorney you draft should incorporate the disposition of your digital assets. An updated listing of all user names and passwords, in addition to the location of key documents, should be available to the Executor of your estate to ensure a smooth administrative process.

Using and updating such a checklist to keep track of all of your important documents and accounts is a good idea for both you and your loved ones. Keep a copy in your safe deposit box as well. This way, when the time comes, your Digital Executor will be able to locate what he or she needs to efficiently — and successfully — settle your estate.

As time goes on, additional legal guidelines for how Digital Executors should access decedents’ digital assets may emerge. In the meantime, one thing’s for certain — the Digital Executor is here to stay. Spelling out your wishes carefully for what you own in cyberspace will ensure they are carried out on Earth after you are gone.